Regulator: inflation in Armenia in 2014 expected to be no higher than projected 4%

YEREVAN, February 24. /ARKA/. The 12-month inflation rate in Armenia is expected to be no higher than the projected 4% in 2014, Vahan Grigoryan, chief of the central bank’s monetary policy division, told journalists on Monday.

He said that in 2013 was recorded at 5.6%, and in January 2014, the 12-month inflation subsided to 5.5% coming back to the projected frames.

The regulator expects the 12-month inflation to continue its downward motion coming closer and closer to the projected 4%.

“More than that – it is expected to shed below the lower benchmark of the permitted range in the third quarter, and after that will come close to our targeted indicator by the end of this year remaining within the planned forecasts, according to the central bank’s forecast,” Grigoryan said.

In his words, the regulator doesn’t expect any inflation pressure from outside markets, since economic things are gradually improving in the United States, EU countries and Russia, and this creates favorable environment for stability at wheat, oil and metal markets. .

“According to our forecasts, private consumption and private investment will speed up this year reaching 5% and 4% respectively,” he said. “Exports and imports will retain their growth speed – exports will grow faster than imports, and individual money transfers’ growth is expected to remain unchanged.”

Grigoryan said that the central bank expected no pressures also from domestic markets, though some influence will come from the public sector, since budget deficit this year is a little higher than that of the previous year.

Nevertheless, he said, even if so, inflation will remain within the targeted frames, and the policy pursued by the regulator in the first quarter, particularly the decrease of the refinancing rate by 0.25% to 7.5% will contribute to that.

In its inflation report based on its monetary policy program, the central bank predicts 2.5% to 5.5% inflation for 2014.

In 2013, the 12-month inflation reached 5.6% - the upper benchmark of permitted fluctuations. In the 2013 government budget, inflation was projected at 4% (±1.5%) and GDP growth at 6.2%, and in the 2014 budget, the inflation rate is the same with 5.2% GDP growth. -0---